Gap coverage

[Anonymous]

Recently, I got an auto loan with Capital one. I noticed the dealer added gap coverage. Through my car insurance with Liberty mutual, I have the better car replacement coverage for $178 a year. Is this the same as gap coverage? If so, could I cancel my gap coverage policy and get it refunded?

Thanks

[nycplayboy78]

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@Anonymous wrote:

Recently, I got an auto loan with Capital one. I noticed the dealer added gap coverage. Through my car insurance with Liberty mutual, I have the better car replacement coverage for $178 a year. Is this the same as gap coverage? If so, could I cancel my gap coverage policy and get it refunded?

Thanks

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Cancel that GAP coverage the dealer gave you ASAP!!! Liberty Mutual is cheaper for you and when you do cancel the GAP from dealer ASK FOR A REFUND ASAP!!!!

[Anonymous]

Is 178 a year really cheaper than what they giving at dealership? Did u put money down? Most car loan is upside down with no money down and higher interest for 3 years so 178 X 3 = 534 which is probably same amount u paid for at dealership for lifetime of loan term which is 60-72 months 

[RonM21]

I'd cancel if it actually is dramatically cheaper.

[Anonymous]

I paid $800 so yes $178 is cheaper. My interest rate is high at 15% and I put down $3k. I plan to refinance once my EQ score is good enough for DCU.

[StartingOver10]

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@Anonymous wrote:

I paid $800 so yes $178 is cheaper. My interest rate is high at 15% and I put down $3k. I plan to refinance once my EQ score is good enough for DCU.

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Great plan! If you cancel that gap with the dealership make sure the refund is either given to you directly or applied to the outstanding principal of the loan.  You will end up paying less than the current schedule with that lump sum credit.  If you have paid for an extended warranty for this vehicle, get the refund on that too (JMO). Most of those warranties are worthless in my opinion....too many exclusions.  If you get a few extra dollars during the term of your loan - put them in savings so you can pay down the principal balance when you refi. That high rate interest makes you more upside down than is typical.  The other thing you can do is take a small amount extra (like $100) and apply it to principal with every payment. This will pay down the principal even faster and cut down the total interest you pay while you are working on your credit to refi.

[Anonymous]

Thank you. I did get the warranty. Its for 60k miles. The car has 44k on it. I can still cancel the warranty even though I signed the loan papers on 5/10?

[StartingOver10]

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@Anonymous wrote:

Thank you. I did get the warranty. Its for 60k miles. The car has 44k on it. I can still cancel the warranty even though I signed the loan papers on 5/10?

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Yes, a warranty is an OPTIONAL ITEM.  Read your contract, usually they have a little box around the statement that the warranty is optional.  Don't get me wrong, they will fight you tooth and nail to not cancel it because it is a huge profit item for the dealership.  The reason it is a huge profit item is because you never know what the warranty actually covers unless you have a written warranty agreement showing all the exclusions (and few included items).  Many dealerships don't even honor what is in writing. That is why I think it is a waste of money. Keep those funds for repairs that you may need and get a good mechanic. That is your best remedy IMO.